The Minister for the South Island says the benefits of a proposed data centre north of Invercargill are “huge”, even as some New Zealanders raise concerns about its electricity use and the pressure it could put on local infrastructure.

James Meager told Chris Lynch Media the project was not a foregone conclusion, but left little doubt he wanted to see it succeed.

“There’s a lot of talk about data centres being consented and potentially being built, but we’re not seeing enough of them actually delivered,” Meager said. He said some people were drawing comparisons with the United States, where data centre growth has been rapid and, in his words, almost unconstrained. New Zealand, he argued, faced the opposite problem. “We don’t have the same operating system here. If anything, it’s probably too hard to get those facilities up and running under the current RMA,” he said, adding that the Government was working on reform in that area.

Meager said the concept behind a data centre was simple. “It is taking land, water, and sunlight, essentially, and turning those natural resources into energy and into data, and exporting that data,” he said. “We have an abundance of land, water, and light, and so we can actually be an exporter of data.”

The proposal comes from Datagrid, which wants to build what would be one of New Zealand’s first large scale data centres at Makarewa, north of Invercargill. Meager said its appeal was that it relied on private investment and sat close to international cabling that could move data quickly overseas.

He said the proposal even included building its own solar generation. “They are wanting to build data centres that are reliant on their own power and not necessarily drawing off existing power connections in the grid,” Meager said.

The minister said he had met Datagrid founder Rémi Galasso. He acknowledged the scale of the project had unsettled some residents, particularly around power demand and infrastructure, but said it could be handled. “We’re going to do it in a controlled and managed way,” he said.

Pressed on how a facility built mainly to serve overseas customers would benefit Southland, Meager said the gains ran from the initial build through to ongoing operations. He said landowners could earn rental income from leasing the site, and that local technical expertise would be needed to keep it running.

“It’s probably fair to say that you’re not talking hundreds of thousands of people working in a data centre, but there is the ongoing cost of maintaining those facilities, procuring the contracts, and actually exporting that stuff,” he said. He said the earnings would not stay offshore.

“They’re purchasing it off us, and when you purchase that off us, all of that income then goes into spend in your local retailers and your local towns and cities, your accommodation,” Meager said.

He also framed the centres as a question of national resilience, saying the Government would eventually have to weigh up how much of its own data should be held onshore.

“You can imagine a time where, if you’re in a geopolitically conflicted world, you want to make sure you’ve got the ability to store and handle your own data, particularly onshore,” he said. Meager said the country had little to lose by building more of this kind of infrastructure.

“We don’t have many data centres in the country yet, if any at all, and it can actually end up being quite a good use of our land,” he said.

A southern space hub

The data centre is one of several technology bets in the deep south. Construction has begun on a new headquarters at the Awarua satellite ground station near Bluff, backed by a loan of up to $2.25 million from the Regional Infrastructure Fund. Meager said the station was part of the same data economy.

“Once you get that data down from the satellites, you want to be able to send it out to whatever commercial operation is actually using it,” he said.

He said geography worked in the region’s favour. “It’s relatively free of radio interference because of the low populations down in Southland, and it’s clear skies, so it’s a good site for it,” he said.

The Awarua project is expected to create about 10 jobs during construction and lift the station’s workforce from 21 to around 30 once it is finished.

A second league team

The minister also covered several other South Island matters, including the prospect of a new rugby league side. Christchurch’s new stadium has reignited talk of a South Island NRL team after the Warriors’ fixture there sold out. Meager, a rugby league fan, said he backed the concept.

“I couldn’t get a ticket to the Warriors game for love or money, so I’m looking forward to possibly a second team,” he said. He said the harder question was what role the Government should play, given how much public money had gone into the stadium. “I don’t think many people want governments to own sports teams,” he said.

Meager said he had met some of the groups behind rival bids, which were starting to coalesce around a single proposal. Rather than ownership, he said the Government could help by pushing for kick off times that suit Australian audiences, better flight connections and support for local hospitality.

Game animals in national parks

Meager, who is also Minister for Hunting and Fishing, welcomed the passing of the Game Animal Council (Herds of Special Interest) Amendment Bill, which clarifies how prized game herds can be managed on conservation land.

Under the National Parks Act, introduced species must be removed as far as possible. Meager said designating a herd of special interest changed that calculation.

“When you put a herd of special interest in place, you’re not trying to eliminate them, you’re trying to manage the numbers down,” he said.

He said managed herds also delivered better outcomes for hunters.

“It helps us manage the herd for hunting values, which means you can get fewer, healthier animals, which are better quality meat and better quality trophies,” he said.

Meager said he expected to designate the first herds soon, with Fiordland’s wapiti and South Island tahr and whitetail among the likely candidates.

Air links under pressure

On news that Jetstar will suspend its Christchurch to Cairns service from late October, blaming weaker than expected demand and rising costs, Meager was relaxed.

“If you look at it all in context, the loss of one route is probably not a major concern for me at the moment,” he said. He said Jetstar alone had added around 90,000 international seats and 120,000 domestic seats in and out of Christchurch over the past year, with Air New Zealand looking at new or returning routes to Perth, Japan and Singapore.

Meager said the Government had deliberately steered clear of a costly rescue. “We could have gone perhaps overboard and got the old COVID response and sprayed the money hose around, but actually the international community responded quite sensibly and quite quickly,” he said.

He said falling jet fuel prices should, in time, ease the pressure on airlines and bring ticket prices down, offering some cost of living relief along the way.